Over 60% of Americans avoid talking about money with their family. Studies show that many people would rather discuss politics or death than open up about their finances.
However, open discussions and financial education can empower the next generation to make better financial decisions. By sharing your personal financial journey with your children, you can provide clarity for your beneficiaries and give yourself peace of mind.
But how do you break the silence?
1. Have a Plan
One of the greatest gifts you can give to your children is to have a personal financial plan that includes considerations for your estate. Putting your wishes “on paper” is imperative to effective communication in the long term. A solid financial plan puts your affairs in order, providing your children with guidance and helping your assets avoid public probate. (You can Learn more about the process of establishing a financial plan here)
While a financial plan does make estate planning simpler for your beneficiaries, it is important to remember that financial plans primarily help you! A well-developed plan can provide clarity, identify potential gaps, and let you focus on living your life.
2. Start the Conversation
Once you have your plan in place, it is time to share it with your children. You do not need to discuss specific amounts but be sure to share the basics of your overall plan. You can start with the types of accounts you own and any potential other assets, such as life insurance or real estate.
Use this as an opportunity to discuss your other wishes, especially around healthcare. This could include whether you have documents such as an advanced care directive or how you are planning to pay for long-term care, such as a nursing home.
Get Into the Details
After you cover the basics, don’t forget to share more personal or specific details such as:
- Who is going to serve as your Personal Representative or Trustee?
- What charities are involved?
- What parameters are there around inheritance (age, job status, etc.)?
As you share your financial plan, be open to questions and concerns from the next generation. Do they want the responsibility? Do they understand the “why” of your decisions? Creating a dialogue can help your whole family stay on the same page.
3. Keep Talking
As tough as these conversations can be, they are not “one-and-done” meetings. You should keep the dialogue going and regularly update your family about any updates or changes.
It is a great idea to introduce your children to your financial advisor. Having a familiar face and an existing relationship can make those next steps, whenever they happen, feel less turbulent for your beneficiaries.
Of course, your financial plan is completely confidential, and your advisor will not disclose any information about your finances to your children. However, you can invite your beneficiaries to your meetings and have your advisor present any details you are comfortable sharing. Your advisor can also help develop a plan for your kids, giving them the gift of a solid financial foundation.
Whether you are talking about budgets for the first time or need help untangling a complex inherited trust, our advisors can help walk you and your family through every step of your financial journey.
We are here to help, whether by answering a quick question or building an in-depth personalized financial plan. Reach out today!
Brian Disher
Director of Wealth Management
Brian’s role is all about relationships. He works to make sure every option is in place to help clients achieve their goals. He works closely with the team of private client advisors to consistently define and demonstrate personalized client service. He finds it gratifying to work with a group of people who share the same vision to provide a level of service and communication that builds relationships across generations.
The information contained within has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy. The opinions expressed are subject to change from time to time and do not constitute a recommendation to purchase or sell any security nor to engage in any particular investment strategy. Investment Advisory Services are offered through Greenwood Capital Associates, LLC, an SEC-registered investment advisor.
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